Returns and expired products create hidden costs that silently erode your margins. While many restaurant owners track obvious expenses, these 'invisible' losses often go unaccounted for. The result? A false sense of profitability that can devastate your bottom line over time.
What are returns and expired products?
Returns and expired products are ingredients you've purchased but can't sell:
- Expired products: Food that's past its expiration date
- Spoiled products: Vegetables that wilt, meat that discolors
- Returns: Products you send back to your supplier
- Damaged goods: Broken packaging, damaged in transit
These costs happen in every kitchen, but they must be factored into your calculations.
Why this impacts your food cost
If you purchase €100 worth of vegetables but discard €15 of them, you've actually paid €100 for €85 worth of usable ingredients. Your real purchase price is significantly higher than you think.
? Example:
You purchase €200 worth of fresh fish this week:
- Usable for dishes: €170
- Expired due to poor planning: €20
- Damaged on delivery: €10
Your actual costs: €200 for €170 worth of usable fish
Actual price: €200 ÷ €170 = 1.18× more expensive than expected
How do you calculate your loss percentage?
The loss percentage reveals what percentage of your purchases you discard or return:
Loss percentage = (Loss in euros ÷ Total purchases) × 100
? Example calculation:
Purchases this month: €2,500
- Expired vegetables: €80
- Spoiled meat: €45
- Returned products: €25
Total loss: €150
Loss percentage: (€150 ÷ €2,500) × 100 = 6%
Accounting for loss in your food cost
There are two approaches to include loss in your food cost calculation:
Method 1: Add loss percentage
Add the loss percentage to your food cost. If you normally have 30% food cost and 5% loss, your actual food cost becomes 35%.
Method 2: Adjust purchase price
Increase your purchase prices by the loss percentage before calculating your food cost.
? Example method 2:
Salmon costs €18/kg, you have 6% loss
Adjusted price: €18 ÷ (1 - 0.06) = €18 ÷ 0.94 = €19.15/kg
Calculate with €19.15/kg in your recipes
Typical loss percentages per product
Different products carry different loss risks. From tracking this across dozens of restaurants, here's what we see:
- Fresh fish: 8-15% (spoils quickly)
- Leafy greens: 10-20% (wilt, outer leaves)
- Meat: 3-8% (lasts longer, but expensive when lost)
- Dairy: 2-5% (clear expiration date)
- Fruit: 15-25% (seasonal, spoils quickly)
- Dry goods: 1-3% (long shelf life)
⚠️ Note:
These percentages are guidelines. Your own loss can be higher or lower depending on your purchasing, storage, and planning.
Minimizing loss
While loss is unavoidable, you can limit it:
- Better planning: Don't purchase more than you can use
- FIFO principle: First In, First Out - use oldest products first
- Proper storage: Good refrigeration and ventilation
- Daily checks: Check daily what's about to expire
- Flexible menus: Daily specials to use up excess ingredients
Recording loss
Track what you discard and why. This helps you identify patterns and reduce loss:
- Date of loss
- Product and quantity
- Reason (expired, spoiled, damaged)
- Value in euros
With digital systems you can track this automatically and calculate your loss percentages per product category.
How do you account for loss in your food cost? (step by step)
Record all your loss over the course of a month
Keep precise track of what you throw away: product, quantity, date, and reason. Also note the purchase value of these products. This gives you a realistic picture of your actual loss.
Calculate your loss percentage per product category
Divide your total loss by your total purchases and multiply by 100. Do this separately for meat, fish, vegetables, and dairy, because each has a different loss percentage.
Increase your purchase prices by the loss percentage
Divide your purchase price by (1 - loss percentage). With 6% loss on €18/kg salmon this becomes €18 ÷ 0.94 = €19.15/kg. Use this adjusted price in your recipes.
✨ Pro tip
Track loss on your 7 most expensive ingredients for 30 days. This captures 80% of your financial exposure while keeping the tracking manageable.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Do I need to account for loss if I throw away very little?
Can I deduct returns from my loss percentage?
How often should I update my loss percentage?
What if my loss is higher than the averages?
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Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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